First Steps to Solvency

getmore4less

I do tend to see things a bit black/white and I know there is a lot more going on but a couple of things have stood out in the last few posts. 

 Wife’s all ‘we could work on exercise together’, wants me to sign up to 10km run with her next year. I’m not even saying I don’t enjoy running or gym because I do but I don’t get the same high from it and all more effort than spending/ driving/ getting wasted. Seems like work tbh and have enough of that in my business life so suppose outside of work I like doing stuff that requires less thought/ working on progression etc.

Part of the issue here is that outside work you have been giving no thought to to what you do.
As the ftype showed(and pretty sure there will be others if you did the same exercise)  that high from it arriving on the drive and taking it out each time  would not have been so  big if you had known what it was costing.

You can change this now by thinking and planning a lot of your regret is the realisation that you are having to work now to pay for the past spending,  fine it won't be that long in the bigger picture and you will be back on track a lot sooner than you are currently envisaging.
No one(very few) have a bottomless pit of money  so work hard in the business and play with what that produces for you and your family.

......
now this one is tough.

Not sure how acknowledging further debt is a good thing? - it’s torturing me further tbh. Did talk to wife about it and she just adds more - res home mortgage. She’s sat and worked out no cars, no cards, no res home mortgage and BTLs with no PGs working to the now budget for food/ fuel etc there’d be over £5k disposable every month. How much money I ‘waste’. She doesn’t want to move or leverage against the equity we have in res home. Hate her getting involved in my finances just as a way to shame me further and tell me I’m not good enough to get the home I want and want my family to be able to enjoy too. 

There are a few issue here your monsters are turning  good stuff against you so lets deal with this.

With your family  finances you need to be bouncing choices off someone and that might as well be the wife as she is a big stakeholder in this project of family.

She is not saying you are not good enough quite the opposite she is saying you have done it, made it,  she is in a house that she is happy with and would like to keep it. 
  
For now that is what you need to accept, once you turn the business round, growing again you can revisit.


Acknowledging the debt is all part of the bigger picture, you can't fix what you don't understand, back to the first point above, you got here because you did not have a clue what was going on with the personal finances,  to fix the problem you have to be in control and know what is happening and where every penny is going and accept these are family finances.

You can have I don't care slush fund  money but it needs to be  earned  it and have that in a budget.

The key here is that anything that is on a contract of any kind is a debt in the sense it needs future income to pay for it. 

You have come a very long long way in just a short time and are dealing with the "debt", 

Budget : under control only spending what's being earned(not 50% over income)
CC debt : is going down with a regular allocation from that income.
RR : you have a plan, keep it long term,  try to make the balloon without finance good strategy to avoid a repeat.
House : good debt on a repayment mortgage so building equity.
PG : plan to start growing the BTL business again which will address that issue over time.
 
I think in your head there is a  "I can borrow may way out of this" where as the wife is the other extreme lets pay everything down and owe nothing, longer term I think she is probably right unless you develop succession plans that allow for other options.

When you look at this from above it all comes back to generating more income both strategies need it,  if you swap the PG on the BTL business so it is ringfenced in case of problems you need to increase your debt on the res and that just puts a dependency on more income from the main business .

Do your PG include the wifes share of the res equity?(ie. are these PG or family ones)

I think we all have "if I knew then what I know now" moments but we didn't because we were growing up and we learn from our experience  good and bad.  

I think you are having trouble seeing the path forward because you are so used to the instant gratification, this is going to take a little longer, not a lifetime away,  keep up the good work and it will look very different end of next year.      

I think there was something else, if I remember I may comment, there is a lot of good stuff going on and plenty of options to explore to help on the turmoil inside you.

Sarahwithlove

You say you hate her getting involved in your finances but actually they are joint finances. You may be the one to earn it hut the home and running of it is joint and she is dependent upon you so I can understand why she wants the reassurance that everything is OK. Could you just postpone any talk of a move and look again in 5 years. How long have you got left on your fixed rate mortgage? You will be in a much better position financially then and if your wife can see that you are in this for the long haul she might then be willing to consider moving at that time. 

strawb_shortcake

Just had a thought about the housing, not sure how it would work so might be wrong ballpark.
But, if you want a 7 figure house, given you are in property, would you be able to build your own home? Presumably you could buy land and build a house worth over £1m for much less than £1m?
It can be a joint project between you and your wife, you would be far more invested in your home if you had designed and built it to your tastes so that might take away the needing something bigger better once you've moved in.
It can be a long term project, something to build towards and creating your forever home, so no rush to get it done in the near future.

I was unsure whether to post, but I then pulled up behind a RR that had ALT in the private plate so thought yes, I will make this suggestion 

theoretica

I have just realised that if you want to give your wife a really good Christmas present now or in some future year she has told you exactly what she wants: an undertaking not to take equity out of your, her and your son's home.

TheAble

I think the problem annabanana is that wanting a house based purely on its market value is irrational. It's just an arbitrary number. Indeed, market value shouldn't be a factor in determining whether to buy a house (other than to sense check the asking price is sensible)

strawb_shortcake

TheAble said:

I think the problem annabanana is that wanting a house based purely on its market value is irrational. It's just an arbitrary number.

I agree, I just thought it might be a better compromise and be a way to move away from "my house cost x" to I built this house, I know which sounds a better achievement to me.

RelievedSheff

TheAble said:

I think the problem annabanana is that wanting a house based purely on its market value is irrational. It's just an arbitrary number. Indeed, market value shouldn't be a factor in determining whether to buy a house (other than to sense check the asking price is sensible)

Agreed. There are several 7 figure houses on the market in our area which we would not live in if we were gifted them. They just would not suit how we live. 

A house first and foremost should be a home, not a cash cow.

JGB1955

Who, in reality, would want the day-to-day costs of running a £1M home?  Nobody I know.

enthusiasticsaver

RelievedSheff said:

TheAble said:

I think the problem annabanana is that wanting a house based purely on its market value is irrational. It's just an arbitrary number. Indeed, market value shouldn't be a factor in determining whether to buy a house (other than to sense check the asking price is sensible)

Agreed. There are several 7 figure houses on the market in our area which we would not live in if we were gifted them. They just would not suit how we live. 

A house first and foremost should be a home, not a cash cow.

I would agree with that.  There are lots of 7 figure properties around here and they are lovely but I could not see my DH and I rattling around in one of them.  Some of them have lovely views though which I wouldn't mind but not enough to go through the upheaval of moving.  I would not like the council tax bills or utilities either.  We love our house, our road and neighbors and are 5 minutes walk from my best friend and daughter and grandchildren so don't see the point.  Primarily the house should be one you want to live in rather than based on the monetary value. 

alt80

Thanks. Lots for me to think about. I listened to the podcast @enthusiasticsaver yes definitely relates to me thanks. I feel I know what I need to do just can't face it a lot of the time. Sound like a time waster who doesn't want to turn my life around I know but suppose I'm afraid I'm going to start failing in business if I embrace a life not solely focused around buying stuff - always helped drive me forward in the past. 

Generally a better day today. Managed to get out with wife/ son/ dog for half decent walk. Got about half way but we took the car so I didn't have to walk home with my ankle - it's getting there slowly but really frustrating. Went back to the car and fell to sleep haha. Spent £15 on Christmas Starbucks freezing cold so we sat in the back of the car watching a film ha highlight of the weekend. Son loved it. Childish part of wife and I did too rest of carpark probably thought we were bonkers.

Made a bit more progress on the Xmas decs front, wife and I did another string of lights. Son wanted to help neither of us thought that was a good idea lol (hanging lights from eaves 2 storeys high) so did a bit inside he could help with too. Victorians would have had him do the lot.

@katsu not going into FILs letter for obvious reasons but yes it was supportive and I've spoken to my in-laws since. I'm sure they only want me to turn it around for their daughter's sake not mine but hoping it will make family occasions a bit easier and quite grateful for it tbh.

@ryanm8655 It's !!!!!! awful mate seeing the debt for what it is. The thing that really gets me is the position I put the portfolio in. Really disappointed in myself always thought whilst the personal was a mess I didn't cross business with personal - well I have and had to face up to it. Hate myself for it and no quick fix out of it. Wife has right attitude about it - like most on here what's done is done, work on getting out the mess, learn from it and don't do it again.

Nothing feels positive right now and then have a load of guilt because I know I've got it better than a lot. Many can't have kids and want them, less income especially round here etc etc All I see with the house right now is a massive embarrassment it's £625k max. Buys a lot in these parts tbf but everyone on here in South East no doubt with 7 fig places probably thinking that's the price of a 1 bed flat or somewhere bigger in a sh*thole, what a loser. So makes me think 'you live in a cheap house mate' which just turns into ‘failure’ and gets my anger going. Wife thinks I'm mad - average house price round here £225k. 

Not gonna lie, I sit and wish I'd tried to get into banking or something rather than just sticking with property. Some of those guys in London earning 7 figures a year but that's nothing but a pipe dream to me.

@Retireinten absolutely no doubt in my mind that's exactly where I'd be - nothing enough. Don't actually like I can never be satisfied have practically no self worth.

@enthusiasticsaver honestly think that's winning tbf being able to play long game not care about income/ property value etc. It’s the only thing I measure my worth by and I'm not happy, know that much. Acknowledging I was spending more than earning has 100 led me to feel bad about myself and know I’m a failure. 

Leverage been my only way to level up in the property world - I want as many units as I can get my hands on. Stupid as I know less units is not necessarily worse but the more units = makes me feel better. Not to say I buy crap investments. I assess my position with them regularly (actually talk it through with trusted member of staff as aware of my own bias) sell if it’s the right time and sold plenty over the years. 

Don’t feel I’ve time to slow down or no chance of keep chasing the levels - I’ll possibly get to next one but not the one after and one after if I slow down. Wife doesn’t get it because she’s not driven in the same way. Tbf you and others have said she has her own drivers - agree with that she does but not about the dream of 8 figure lifestyle for her.

@woahsoah / @warby68 She’s not the only one who has a line re substances - it’s 100 something I need to not be doing again in the context I was - it wasn’t about having a good time at all and 100 know that’s a road I don’t want to travel down.  

Need to go cold turkey with the spending or progress going to be even slower, will just have to take the mental health hit.

@TheAble Selling 1 wouldn’t really take much pressure off and nothing right now I’d like to sell (have properly considered). Though I deserve to feel under pressure with what I’ve done tbf. 

@getmore4less 100 true re no thought to outside work. In the background I’ve costed RR (think I put that up tbf), BMW, a couple of stupidly expensive holidays I have some big regrets over those said before I don’t mind spending less on this seeing a bit more culture rather than hiring a Maser. Also costed a few JL/ other spending binges. 100 disappointed in myself. Actually not too much over RR which I know a lot on here think is disgusting.

Ha yeah probably right about wife and house, it's not made it for me but should park it for now agreed.

100 agree re not fixing what I don’t know. Honestly if this was someone in business and hadn’t got a clue what was going on with the money side I’d tell them they probably ought not be in business. Can opt out of life but don’t really see that as a solution for me right now.

I needed to get a grip over budget pdq mate when I saw it on paper I was absolutely disgusted with myself. Not really a win just something I shouldn’t have let get so out of control in the first place.

Think you’re probably right about in my head somewhere thinking there’s a quick fix / borrow my way out of it. Re PG my solicitor explained it as ‘my share’ of equity - wife has no involvement in portfolio so if it all went bad I’d be the only one declared insolvent and equity of res home would be deemed 50/50 between wife and I so far as I'm aware. Not that it’d make much difference. If it went wrong - it’d go wrong big time, I know that. For me bankruptcy = big potential of losing businesses, definitely lose res home, a chance of losing my professional membership. Life would 100 not be worth living. Might seem like I’m totally reckless but I choose what I buy very carefully re property. Not to say things always go to plan though realised partnering up would be better for me on (what I see as) massive construction projects from the block.

Thanks mate. See no good stuff going on but I am so used to the instant gratification you’re definitely right about that so who knows.

@Sarahwithlove ISWYM but tbf I came into the relationship with a business / house etc. Know in the event of divorce a court wouldn’t care. Wife has nothing to lose ultimately if that makes sense. Not to say I don’t care about her because I do. 

Fixed rate ends January - choice of 2yr or 5yr fix at 1.4% so payment going down. You’ve reminded me I need to sort it now though. 

@annabanana82 / 7 figure house - Nice idea re self build but not for me I prefer old houses. Sister actually lives in a self build (every Architect's dream haha) which she loves so I do get it but wouldn’t get me the features I like. Happy to develop to flip if right projects come up though. 

I know basing on MV is just asking for wanting more but I’m obsessed with the idea of getting there to my detriment in fairness.

Day-to-day running: the places I’m looking at not too much more than my res home tbh. Basically a similar size house in the one part of the city which is better than where I live. Did make me laugh re council tax - I hate that bill haha. Current house is band f so not a massive difference but absolute rip off bill and another example of government penalising anyone they think is doing ok in life.